THIRUVANANTHAPURAM: The Comptroller and Auditor General (CAG) has recommended that the Kerala government sell or shut down loss-making public sector enterprises (PSUs). This is the first time CAG has made such a recommendation for Kerala. The report was submitted to the Legislative Assembly yesterday. The government is expected to make the final decision.
For years, the government has been sustaining 36 public sector enterprises through loans and other financial aids, but they have been unable to even pay the interest on those loans. In just the past year alone, liabilities have amounted to Rs 1,873.89 crore, and the government is facing a loss of Rs 18,026.49 crore. The government's total investment in these PSUs is Rs 22,318.09 crore, which includes Rs 10,015.46 crore in capital and Rs 12,302.63 crore in long-term loans, which has resulted in these substantial losses.
Among 44 institutions, the government investment is valued at Rs 5,954.33 crore, while the losses amount to Rs 11,227.04 crore. The report points to mismanagement, with an inability to control expenses and poor accounting practices, including a lack of accurate auditing records.
In addition, the report highlights that 105 institutions have failed to provide accurate financial statements according to the Finance Accounts or records of Public Sector Enterprises (PSEs). Notably, the Kerala State Road Transport Corporation (KSRTC) has not submitted accounts since the 2016-17 financial year.
In the fiscal year that ended in March 2023, the state public sector made a profit of Rs 1,368.72 crore. Chief Minister Pinarayi Vijayan, during the CPI(M) state conference in Kollam, emphasized that there is a need for a reevaluation of loss-making public sector enterprises and suggested that these entities should be improved through public-private partnership (PPP) models with the cooperation of private investors.
Total number of state-owned PSUs: 149
Loss-making PSUs: 77
PSUs with no operations: 18
Profit-making PSUs: 54
Institutions causing liabilities: 95
Reasons for losses:
Enterprises in crisis: 15
Travancore Titanium
Poultry Development Corporation
Trivandrum Spinning Mill
Meat Products of India
Kerala Transport Development Finance Corporation
Kerala Rubber Ltd.
Cashew Development Corporation
Kerala Automobiles Ltd.
Textiles Corporation
Kerala Ceramics
Kerala Metal Industries
Tracko Cable Company
Travancore Cement
United Electricals Industries
Civil Supplies Corporation
KSRTC
Enterprises with significant profit (Annual profit in crores):
KSFE - 901.28
Beverages Corporation - 1106.91
Minerals and Metals - 1172.58
Backward Community Development Corporation - 248.90
KFC - 155.72
Industrial Infrastructure Development Corporation - 170.01